For decades, David Caute has written both histories of ideas and novels. I've always preferred his novels, in particular Comrade Jacob, a sympathetic account of Gerrard Winstanley and the Diggers during the English revolution (Caute's history tutor at Oxford was Christopher Hill). In his new book, he has expanded a cold war footnote into an entire volume, but has performed a valuable service in doing so. The work is a portrait of Isaiah Berlin, with whom the author shared a perch at All Souls College, Oxford, where they engaged in lofty conversations. One of the less elevated talks concerned Isaac Deutscher, and troubled Caute.

Berlin the liberal political philosopher and Deutscher the Marxist historian were both asylum seekers, given refuge and residence in Britain during the early decades of the last century. That was about all they had in common. Their intellectual trajectories pointed in opposite directions. Berlin was escaping the Russian revolution, Deutscher was fleeing from the armies of the Third Reich, poised to take Poland. Both were Jews: the first was a Zionist, who annoyed Chaim Weizmann by refusing all his requests to move to Tel Aviv and become an adviser; the second famously defined himself as a "non-Jewish Jew", and despite arguing with David Ben-Gurion, remained sympathetic to Israel – until the 1967 war. Deutscher's next of kin had perished in the camps. His surviving relations lived in Israel. He died in 1967 aged 60, and his last interview in the New Left Review took the form of a prescient warning to Israel, comparing its intransigence to that of old Prussia: "To justify or condone Israel's wars against the Arabs is to render Israel a very bad service indeed and harm its own long-term interest … The Germans have summed up their own experience in the bitter phrase: 'Man kann sich totsiegen!' 'You can triumph yourself to death'."

Berlin became an influential figure in British and American public life. His packed early morning lectures at Oxford on Marx were bracing. He was a witty raconteur, intelligent and not averse to replying to hostile questions. His speaking style was confected, a parody of an upper-class English voice replete with stutter and a disjointed laugh. Even his loyal biographer, Michael Ignatieff, was compelled to remark on his over-the-top Anglophilia. Berlin was a liberal fanatic, a staunch empire loyalist, gliding effortlessly from Britain to the US when the time came. He was at his happiest when close to power, an instinctive courtier, unless insulted or ignored. During the 1970s he was invited to Iran, then under the Shah, when dissidents were being hanged naked or toasted on racks by the hated secret police. He accepted. His fee was never disclosed, but the subject of his talk, "On the Rise of Cultural Pluralism", irritated the empress Farah Pahlavi. He was barely halfway through when the empress signalled a factotum to bring her torture to an end and stop the lecture. Berlin later confided to a friend that it was as if he had been "stung by several wasps". But why had he gone in the first place?

Berlin has been much written about. Ignatieff's 1998 biography was itself the subject of a savage assault by Christopher Hitchens, one of the finest essays he ever wrote, identifying all that Ignatieff had left out. This included justifications of the 1965 massacre of more than a million Communists and other leftists in Indonesia; as well as the horrors of the Vietnam war, a conflict planned and carried through by the liberal technocrats of the Democratic party whom Berlin adored. Deutscher has yet to find a biographer. Deeply hostile to American imperialism, he was never uncritical of the Soviet Union and, as a consequence, was often slandered in the Stalinist press. He had a visceral dislike of former Marxists who supposedly saw the light and became cold-war pawns, subsidised by the CIA via the Congress for Cultural Freedom – the magazine Encounter was a particular bete noire. Forced to live off freelance earnings writing for the Economist and the Observer, Deutscher sometimes cut corners to meet a deadline, but the prose was always meticulous. His three-volume Trotsky biography is beautifully written.

Deutscher had to write continuously to earn money and that is one reason why he wanted the stability of an academic post. He was offered one by the University of Sussex, but as I wrote at the time in the Black Dwarf, Berlin blackballed him – Caute writes that he consistently denied the accusation. Caute's excavation of the archives leaves no doubt whatsoever that Berlin lied. When the vice-chancellor of Sussex consulted him on Deutscher, Berlin let the guillotine drop without any hesitation: "The candidate of whom you speak is the only man whose presence in the same academic community as myself I should find morally intolerable." But he wanted to be helpful: he would not object to Eric Hobsbawm or C Wright Mills. End of story. Why did he react so strongly? It was not just the politics. Caute suggests, plausibly, that the reason for the bile was personal. Behind the mask and despite the self‑denigration, Berlin was insecure and vain. His first book, Historical Inevitability, was reviewed negatively by Deutscher in the Observer. The insult would never be forgiven.

Caute's account of Berlin's earlier vendetta against Hannah Arendt is an eye-opener. Together with Einstein and other prominent Jewish intellectuals, Arendt had criticised Israel for its encouragement of "fascist"-style nationalists who had carried out massacres in Deir Yassin and elsewhere. Berlin was a loyal Zionist from afar; Arendt was anything but. Besides, she was never impressed by his intellect and may well have made this clear at some private gathering. When consulted by Faber & Faber as to whether they should publish The Human Condition, her book on political theory, Berlin responded: "I could recommend no publisher to buy the UK rights of this book. There are two objections to it: it will not sell and it is no good." The book was never published in the UK. Later, when her book Eichmann in Jerusalem created a storm in US literary circles, Berlin stoked his close friend John Sparrow (the warden of All Souls) to rubbish it in the TLS (where all reviews were at that time anonymous). Arendt and Mary McCarthy did some detective work, and discovered the reviewer's identity. McCarthy wrote later that "Hannah was convinced that several passages could not be the work of a gentile."

In Caute's words, Berlin regarded Deutscher as a "specious, dishonest, arrogant charlatan and an enemy of Israel". Readers of the book will judge for themselves which of them was the charlatan.